Sy Says Buy Hatteras

Newly public Hatteras Financial (HTS) is popping higher today after some kind words from Sy Jacobs, who is founder and managing member of the Jacobs Asset Management hedge funds. In an interview with Barron's over the weekend, Jacobs said his fund is long HTS --

[Hatteras shares are] trading at just over one times book value... We [Jacobs' fund managers] estimate that they will earn $4.50 to $4.75 a share from mid-year '08 to mid-year '09, once the IPO proceeds are invested. As a REIT, they will pay out all -- or nearly all -- of their earnings in dividends. So at 25 recently, the stock was sporting an expected yield of around 19%. We think the stock gets to 30 at least. Between the appreciation and the yield, it's a great total return.

Shares of Hatteras Financial were up about 5% at last check to $26.25. That's just 5% above the IPO price of $25/share, but certainly a much better performance than American Capital Agency (AGNC), which was flat on the day. AGNC is still stuck near $19, below its IPO price of $20/share.